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Lockheed Martin
Old 10-11-2010, 01:30 PM   #1
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Lockheed Martin

I noticed while looking at charts this weekend that Lockheed Martin (LMT) is 18% off it's 52 week high and pays a dividend of $3 (4.25% yield).

I think it would be a stable stock with a nice dividend.
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Old 10-11-2010, 01:40 PM   #2
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I noticed while looking at charts this weekend that Lockheed Martin (LMT) is 18% off it's 52 week high and pays a dividend of $3 (4.25% yield).

I think it would be a stable stock with a nice dividend.
You have assumed that budget pressures going forward won't affect LM and other defense contractors. Their dividend is by no means assured going forward. Ditto for the stock price.
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Old 10-11-2010, 02:01 PM   #3
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I think it would be a stable stock with a nice dividend.
The conventional term for this thinking is "value trap".

"Bargains" like this were everywhere in 2008-2009...
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Old 10-11-2010, 02:19 PM   #4
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I bought some of this back in the early 90s when it was still Martin Marietta. How could you not own stock in a company known to it's employees as "Martian Marijauana"? Sold it after a big run up in 2002 (9/11 profiteering). I see no appeal to it now with it's new name.
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Old 10-11-2010, 05:54 PM   #5
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I guess the question is "WHY do you think it would be a stable stock?"

The defense industry is very cyclical and driven to a considerable extent by the power of certain congresscritters with a lot of jobs in their district, rather than the actual merits of the products or the actual needs of the services.
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Old 10-11-2010, 11:32 PM   #6
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Looking back over our (mostly negative) comments, I should also point out that none of us have the strength of our convictions to actually short Lockheed Martin-- especially not considering the payments we'd have to make in lieu of dividends.
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Old 10-12-2010, 06:22 AM   #7
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I was trying to find the articles I read to explain the train of thoughts that lead me to LMT.

I read this and this within the same week and set about this weekend to learn more about the Russell 1000 stocks in the 2nd quintile.

There was another article, which I can't find again, that said to seek out slightly beaten stocks whose company's culture believed in dividends when dividend hunting. So I paid special attention to stocks that dropped during the flash crash on May 6th and were having a hard time getting up again (because they are unloved?).

Also around the same time that FedEx announced it was cutting 100 centers and laying off 1000 ppl (much loved, stock moved up on this gloomy news) I remember reading a snippet that Lockheed Martin was hiring 1700 ppl.

No more time to post now - off to work.
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Old 10-12-2010, 11:08 AM   #8
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Well I could see a portion of your portfolio in beaten down dividend paying stocks. They just may do well over the long term.

For those recommending Lockheed Martin their logic goes like... We need defense since we are at war, therefore this stock just may be a fabulous deal.

They may be right, of course. But then again we just may see some budget sanity going forward and some just may suggest - What do we need all this defense crap for ? In that case Lockheed gets punished. Therefore is some risk to buying stocks like Lockheed.
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